On August 8, 2025, China's highest judicial authority—the Supreme People's Court (SPC)—issued a comprehensive set of judicial guidelines to enforce the newly enacted Private Sector Promotion Law. This move marks a watershed moment in China's ongoing legal reform, reflecting a resolute commitment to creating a transparent, fair, and predictable business environment for private enterprises. For foreign investors, multinational corporations, legal and financial service providers, this initiative signals enhanced judicial backing that addresses long-standing challenges such as market access barriers, financing constraints, intellectual property protection, and dispute resolution inefficiencies. 

The Private Sector Promotion Law, effective since May 20, 2025, is China's first fundamental statute dedicated solely to private economic development. The SPC's 25-article Guiding Opinions operationalize this law by detailing judicial policies to tackle practical challenges faced by private enterprises, ensuring uniform application of the law, and providing clear legal certainty nationwide.

The guidelines emphasize five core pillars:

1.Equal Legal Protection: The judiciary enforces the “entry-unless-prohibited” principle, guaranteeing private enterprises equal market participation rights, fair treatment, and protection against administrative abuses such as local protectionism or anti-competitive practices.

2.Guidance Toward Lawful and Standardized Operations: Through case law publication and judicial interpretation, courts promote sound corporate governance within private firms, crack down on internal corruption and bid-rigging, and uphold labor and consumer rights—areas crucial to risk mitigation for cross-border investors and partners.

3.Strict and Fair Judicial Enforcement: Judicial mechanisms strengthen property rights protection, promptly rectify enterprise-related miscarriages of justice, and uphold business owners' personal rights—boosting trust in China's dispute resolution landscape.

4.Efficient and Accessible Litigation Services: Courts are tasked with optimizing dispute resolution processes, lowering legal costs, facilitating mediation and credit rehabilitation to reduce operational burdens on private firms.

5.Support for Internationalization: The guidelines underscore enhanced support for private enterprises' “going out” strategies, including streamlined cross-border litigation, international commercial arbitration, and legal services aligned with the Belt and Road Initiative (BRI).

The private sector in China accounts for over 60% of GDP, employs nearly 80% of urban workers, and contributes over 70% of technological patents, underscoring its pivotal role in China's economy. SPC President Zhang Jun emphasized that “strict, impartial judicial protection is indispensable to unlocking market vitality and safeguarding legitimate rights.”